Ayala makes $237.5-M gamble in biggest Filipino investment in Myanmar

Ayala Corp., the county’s oldest conglomerate, is making a $237.5-million bet on Myanmar as it takes a stake in the Pun family’s Yoma Group, a company with businesses and values that align with its own.

The deal, branded as the largest Philippine conglomerate investment in Myanmar, would give Ayala 20 percent of the Myanmar group, comprised of Singapore-listed Yoma Strategic Holdings Ltd. (YSH) and Myanmar-listed First Myanmar Investment Public Co. Ltd. (FMI).

Ayala, which has a market value of $10.4 billion—about 10 times the size of Yoma Group—will be the second-largest investor in both entities.

The Yoma Group has interests that span property, banking, automotive, health care, power and tourism. Those are similar to Ayala’s own consumer, property and infrastructure thrusts.

“We have always believed that the Asean has massive potential to reap the benefits of Asia’s rise in the global economy. Ayala can definitely move closer to this aspiration by working with a respected and diversified conglomerate in the region,” Ayala chair and CEO Jaime Augusto Zobel de Ayala said in a statement Thursday.

Myanmar, which transitioned to democratic rule less than a decade ago, is one of the fastest growing countries in the region and remains underpenetrated, according to the firm.

April Lee Tan, COL Financial Group Inc. research head, sees the investment as a long-term investment for Ayala.

“Myanmar is still in a fast growth pace with great potential,” she said on Thursday.

Paolo Borromeo, Ayala group head for strategy and planning, said the group had been seeking investments in Myanmar since 2012.

It previously explored opportunities in retail, water and telecommunications. However, those ventures did not progress.

Myanmar’s economic profile also shares similarities to the Philippines in that both have young growing populations, robust consumer markets and support from workers overseas, Borromeo added.

“We are confident that by leveraging our own capabilities and experiences over the last 185 years, Ayala’s partnership with the Yoma Group could certainly help improve the lives of people in Myanmar through purposeful business,” Ayala president and chief operating officer Fernando Zobel de Ayala said in the statement.

Last month, Ayala’s power subsidiary AC Energy announced a partnership with YSH to help develop around 200 megawatts of renewable energy in Myanmar. This will provide sustainable power to about 70 percent of people in rural areas.

“I am extremely pleased and honored to have Ayala become one of our most important strategic partners, a partnership that reflects their faith in the future of Myanmar, and validates the Yoma Group’s business model,” Serge Pun, executive chair of YSH and FMI, said in the same statement.

“Ayala is one of the foremost conglomerates in the Philippines; a family business that has endured generations of change, while maintaining a stellar track record in many sectors across the economy. We have much to learn, and they have much to teach us,” he added.

Ayala, which also has interests in telecommunications, water services and manufacturing, has established its presence in Indonesia, Vietnam, and China, as well as in Australia, Europe, United States and Mexico.